Need to Make an Insurance Claim?
Need to make an insurance claim? If you’ve been doing your research, you might’ve seen terms such as property insurance, casualty insurance, first party insurance claims, and third party claims. But what are they and how do they relate to your insurance claim? It’s important to differentiate between property and casualty insurance in order to better understand how first party and third party insurance claims work.
First Party Insurance Claims
First party insurance covers the insured (the person or “entity” that the insurance policy is written to protect) against loss or damage to their own property. For example, Tony is covered on his insurance policy for damage to his business property (personal and buildings) and if the property is damaged by fire, his policy will cover the damage up to the policy limits.
Third Party Insurance Claims
Casualty insurance (also called third party or liability insurance) covers the liability of an individual or entity for their negligent acts or omissions, where third parties (people who are not insured under the insurance policy but are covered for loss, injury, or damage) are injured, or their property is damaged. For example, if Tony has a customer who slips and falls on his business property and he is found to be negligent, the liability portion of his insurance policy will cover him against lawsuits initiated by other people, up to the limits of his policy.
Just keep in mind, liability insurance does NOT cover liability to the insured person or their property. In other words, the insured person or entity cannot sue themselves in order to collect under the liability portion of their policy.
Common First Party Property Insurance Coverage (Types of Perils)
- Fire, smoke damage
- Theft
- Breakage of glass
- Wind, hail, rain
- Aircraft
- Riot, malicious mischief, civil commotion
- Vehicles
- Earthquake, tornadoes, other disasters
- Lightning
- Open perils (all perils except those specifically excluded in the insurance policy). Peril, is defined as a specific cause of loss, or risk that is covered by an insurance company. Common examples include things such as fire; smoke damage; theft, as well as the other items listed above.
- Named perils (only the perils that are specifically named in the insurance policy)
Common Third Party Casualty Insurance Coverage
- Physical injury to persons who are not insured on the policy
- Damage to property not owned by people or entities insured on the policy
- Reputational harm (slander or liable) to persons who are not insured on the policy
To sum up, first-party insurance is purchased by a person(s) to cover themselves and their property, and third-party insurance is purchased by individuals or entities to protect themselves from lawsuits brought by others. Keep in mind that the second party is always the insurance company.
Also, property and casualty coverage is most often bundled together. This type of comprehensive coverage is ideal for those who are insured and wish to maximize coverage for personal and real estate property while also minimizing their out-of-pocket payments as a result of a lawsuit.
If you need legal representation after suffering a property or casualty insurance loss, you can contact the Smythe Law Group, Inc. for help.